Table 2.3
Gross domestic product (GDP): three methods of calculation – example in a hypothetical economy

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  Value of total output Purchases from other enterprises and imports Net value added of production
Value added approach dollars

Firm 1

(50 + 100) = 150 15 (150 - 15) = 135

Firm 2

(130 + 35) = 165 100 (165 - 100) = 65

Firm 3

200 130 (200 - 130) = 70

Total

515 245 (515 - 245) = 270
Income approach dollars

Firm 1

Labour income and profits (115 + 20) = 135

Firm 2

Labour income and profits (45 + 20) = 65

Firm 3

Labour income and profits (60 + 10) = 70

Total income earned in current production

Empty cell  Empty cell  270
Final expenditure approach dollars

Firm 1

Exports 50

Firm 2

Sales to consumers 35

Firm 3

Sales to consumers 200

Sub-total

Empty cell  Empty cell  285

Less: Imports

Empty cell  Empty cell  15

Total final sales from current production

Empty cell  Empty cell  270

Source: Guide to the Income and Expenditure Accounts, Statistics Canada, catalogue no.13-017-X